Donations Tax Quiz

Mr Adventurous is going to participate in a stunt on the reality TV show, Fear Factor South Africa. He promised his son that if he dies while participating in a stunt, that his Mercedez motor vehicle (current market value: R500 000) will be given to his son.

If Mr Adventurous dies while participating in a stunt, which one of the following statements in respect of his motor vehicle is correct?

• It will be subject to donations tax, but not subject to estate duty.

• It will not be subject to donations tax, but will be subject to estate duty.

• It will be subject to both donations tax and estate duty.

• It will neither be subject to donations tax nor estate duty.

• Neither one of the above.

Ayanda donated her laptop to Jabu with a market value of R11 000 on 31 May 2021. By the 1st of July 2021 Ayanda failed to pay the donations tax on this donation to SARS.

Who will be held liable for the donations tax?

• Ayanda is still solely held liable to pay the donations tax.

• Jabu will now solely be held liable for paying the donations tax.

• Both Ayanda and Jabu may be jointly held liable for paying the donations tax.

• Ayanda may pay it over to SARS when/if she makes the next donation.

Barak (Pty) Ltd issued an interest-free loan to the Barak Trust while the official rate at that time was 7% and the market rate 8%. Is there a donation for donations tax purposes?

• Yes, there is a donation and therefore donations tax consequences.

• No, there are no donations tax consequences.

• No, there are no tax consequences.

In the previous question; the donations would be calculated as the difference between...

• The market rate and actual rate charged.

• The official interest rate and the actual rate charged.

• The official interest rate and the market rate.

• The prime interest and market rate.

The previous donation is regulated in terms of section...

• 7(1)

• 7(c)

• 7C

• 56(1)